Real estate prices ‘cooling,’ but ‘not a fire sale’: Expert
Recent economic data reveals housing sector slowing after two years of growing demand
Real Estate brokerage firm Douglas Elliman vice chair Dottie Herman argued on Thursday that home prices are "cooling," but "it is not a fire sale."
Speaking on "Cavuto: Coast to Coast" on Thursday, Herman explained the current "issues" in the real estate market, noting that the current uncertainties in the world and the debate over whether the U.S. is in a recession are causing prospective home buyers to wait.
The real estate expert also pointed to the "shortage of inventory," noting that a "normal supply" of inventory is about six and a half months, but currently there is about three.
"When you have more buyers than you have inventory, you’re not going to fall into a market where nobody buys properties," Herman told host Neil Cavuto.
HOMEBUYING COMPETITION FALLS TO LOWEST LEVEL IN 2 YEARS
She added that in her 30 years in real estate, she has "never seen anything like the last two years," noting that "we are coming back to a more normal market."
"This is good for the buyers. They will be able to make a few concessions, but by no means is there a fire sale," she added.
Herman then said that she believes "some price growth" should be expected, but not 14 to 18% year-over-year growth that was seen recently.
She also pointed to mortgages, noting there are "a lot of different types" and urged prospective homebuyers to discuss those options with a bank.
The average rate for a 30-year fixed-rate mortgage dipped slightly this week as volatility continues in the cooling U.S. housing market.
Freddie Mac's latest Primary Mortgage Market Survey released Thursday shows the average rate for the benchmark 30-year fixed-rate mortgage is now at 5.13%, down from 5.22% from last week but well above the 2.86% average a year ago.
The average for a 15-year fixed-rate note also fell, dropping to 4.55% from 4.59%. A year ago, the 15-year rate averaged 2.16%.
A slew of recent economic data shows the housing sector is slowing down after two years of pandemic-fueled demand as the Federal Reserve hikes rates to combat soaring inflation.
Data released Thursday by the National Association of Realtors showed existing home sales dropped for the sixth straight consecutive month in July, plunging 5.9% to the lowest level May 2020.
As Herman noted, recession fears have also been weighing on would-be buyers who are increasingly rattled by sky-high home prices and the squeeze on their wallets from inflation. Home sale cancellations soared to a 2-year high last month.
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Herman also warned that she doesn’t believe there will be any breaks in rental prices, which "are off the wall."
She advised that "if you can afford to buy, you should."
FOX Business’ Breck Dumas and Megan Henney contributed to this report.